AmorePacific OceanIts makeup brand Innisfree has closed stores in China.AmorePacific OceanThe group stated that in the future, it will focus on the mid-to-high-end and online sectors in the Chinese market.Some insiders said that Innisfree’s Yinguan store might be inGet rid of the “baggage” to improvePerformance。
Innisfree Grand closed store
It is the New Year’s Day holiday, Xidan, BeijingJoyThere was a lot of voice inside, but the counter of Innisfree had already “closed.” The staff of the store next door told the China Business Daily that in June 2021, they had heard that Innisfree would close the store. According to media reports, In 2021, Innisfree has closed more than 170 stores in China.AmorePacific OceanAnother makeup brand under its brand, Eti House, closed all its offline stores in the Chinese market as early as March 2021.
China Business Daily reporters are positioned in Beijing and are inBaiduSearch in the map and find that XidanJoyThe Innisfree store, CapitaMall Taiyanggong store, and Huaifang Wanda store’s Innisfree store have all been temporarily closed. The relevant person in charge of Amorepacific stated publicly that the group is optimizing the channels of the Innisfree brand, and the number of stores will be reduced to 140, and such store adjustments will continue in 2022. In the new round of strategic adjustments in the Chinese market, only Innisfree stores are optimized and reduced, and other brands are not involved.
“The cost of makeup is relatively low, and Korean makeup products represented by Innisfree have been fighting a price war with domestic makeup products in recent years, and there is almost no profit.” Beauty marketing practitioner Kong Sihan told a reporter from China Business Daily, Guan The store must be related to performance.In price, Korean makeup is basically the same as domestic makeup;In personalization, Domestic make-up is more and more in line with the aesthetics of modern young people. “The market is so big. It is reasonable for domestic cosmetics to seize the target consumer group of Korean cosmetics before. Without good performance, foreign cosmetics giants can only choose to close stores to maintain their profits.”
Group online sales are hot
After the offline store was closed, the brands of AmorepacificThe online market is still hot. In addition to cosmetics brands, many high-end brands under Amorepacific have achieved good sales in the Chinese market. During the “Double 12” period in 2021, Sulwhasoo, a brand of Amorepacific, has emerged in all major sales lists. A reporter from China Business Daily inquired about flagship stores such as Tmall and Douyin and found that Sulwhasoo, which is positioned in the high-end market, has adopted a “discount strategy” in the Chinese market. In the Douyin live broadcast room, the original price of 890 yuan for the muscle pack is only 269 yuan after discount. In the official flagship store of Sulwhasoo on Tmall, the discount price of the three-piece ginseng water emulsion essence set at 2,180 yuan is 1,610 yuan.
In recent years, foreign cosmetics giants have paid more and more attention to the sales performance of online channels. A relevant person in charge of a foreign beauty giant once told a reporter from China Business Daily that, unlike in the past few years, foreign beauty brands have paid special attention to e-commerce channels in the Chinese market. Many brands have joined the “Double 11” and “Double 12” early. In the warm-up event, the pre-sale mechanism and store-wide sales promotion activities of the flagship store “Double 11” and “Double 12” were announced in advance. In 2021, foreign beauty brands hope to extend their online business territory in the Chinese market through online stores. Everyone has indeed seen the effect. The online business influence of some core foreign cosmetics brands has indeed been greatly improved.
In the live broadcast room of Innisfree’s Tmall flagship store, the products are even more discounted. A reporter from China Business Daily noticed that some of the products in the flagship store that had sold more than 10,000 pieces had slogans of “Buy One Get One Free” and “Half Discount”. Many consumers leave messages saying that online discounts are stronger and they prefer to buy products from online malls.
The group focuses on mid-to-high-end brands
“It can also be seen from the intensity of the discounts in the live broadcast room that Innisfree has joined the’price war’ and completely abandoned the mid-to-high-end route.” Kong Sihan said frankly, this also means that the brand’s profits will plummet, which is a major issue for the group. It is said that closing stores may also mean cleaning up the door, abandoning low-end brands, and focus more energy on more profitable mid-to-high-end brands. If Innisfree has been at a loss, the brand may be sold by Amorepacific Group.
Low-end brands have low profits or become reasons for rejection.In Amorepacific’s financial report, the one in front of Innisfree’s Yinguan storeOperating incomeA year-on-year decrease of 37%, less than half of the 770 billion won at its peak in 2016, operating profit also plummeted by 89%. Amorepacific Group publicly stated that in the future in the Chinese market, the group will focus on the mid-to-high-end and online sectors.
Choose to abandon low-end brands or become a way for foreign cosmetics groups to improve their performance. Except for Amorepacific,ShiseidoIt also sold a number of personal care brands for the mass market such as pharmacies and large retailers in 2021. The relevant person in charge of the aforementioned foreign beauty giant once admitted to a reporter from China Business Daily that while the group chooses to sell or suspend the brand, it will continue to look for new brands.In the cosmetics industry, brand renewal is normal. After all, the price of the brand represents the image of the product in the minds of consumers, and the mid-to-high-end brands that are popular with consumers have always been the direction everyone in the industry is catching up with. In the future, in the brand change, the competition of foreign cosmetics brands in the mid-to-high-end market will become more and more fierce.
(Source: China Business Daily)
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